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African Investor Summit
Maputo, 27th February 2009
By Rui Monteiro
Managing Director of TurConsult, Lda

The overall 2% growth in international tourism for 2008 builds on the strong results of the first part of the year, before the collapse of the financial markets. The second half of the year showed an abrupt shift in trend with international tourist arrivals flat or showing negative growth in each of the last six months of 2008.
 
Overall, the 5% growth between January and June gave way to a 1% decline in the second half of the year. Though certainly not immune to the economic woes, tourism has initially resisted the economic downturn better than other economic sectors, such as construction, real estate or car manufacturing.

Growth was negative in the last six months of 2008 in both Europe (-3%) and Asia (-3%). The drop is even more significant in Asia given its double digit growth in 2007 and strong showing in the first part of 2008 (+6%). On the other hand, the Americas (+1%), Africa (+4%) and the Middle East (+5%) still posted positive results in the second half of the year, although with a significant slowdown compared with the period between January and June.

International tourism receipts represented in 2003 approximately 6 per cent of worldwide exports of goods and services (as expressed in US$). When considering service exports exclusively, the share of tourism exports increases to nearly 30 per cent.

History proves that crises can also provide opportunity, because it calls for substantial efforts and industry solidarity. Moreover, if short-term crisis actions can be aligned with the continuing longer-term global poverty and climate needs, the overall industry structure may actually be strengthened.
"We should stop the looting of our natural and environmental resources. We should enhance the potential of our human resources. We should take better advantage of our wealth."

The success of tourism in our lands has had unintended effects for local communities. In the past 20 years, the resources in dedicated tourism areas where tourism and management occur have largely been transformed from working or barren, to recreational land and seascapes. In Mozambique, 31.5% of the total land is dedicated to conservation areas. While sustainable practices are encouraged in the conservation’s community use zones, the relationship between the local communities and the park is ambiguous at best.

Community zones actually have fewer target industries than tourism zones. The space in which communities can practice their trades becomes even smaller when we are told that community zones include tourism use, while recreational zones exclude local communities. Allowing everyone access to this space disadvantages communities, as they must compete with tourists for access to the available resources.

So actually, who is doing what to benefit these communities and ensuring that a harmonious level of understanding is obtained?
Policies need to be adapted in order to ensure the survival of both the private sector and the communities, otherwise the attitude of both is of hostility and eventually the State has the job of having to mediate and lose altogether the credibility that it is hard at work in creating.

Obviously I speak for Mozambique where tremendous efforts have been put to ensure legislation is executed and applied at all levels to try and ease poverty. Having said this however, there is a long, long way to go before a market aggressive attitude is achieved. This, in essence is the barrier to go out in the world and start competing for tourists. We have all the available natural resources to be able to develop them in the correct manner, to ensure a healthy business environment growth, but we lack the main resource which is the human one. Training is paramount to assure better self esteem and increase the present service level. Notably, the attitude of the communities is primordial and this comes with education. We do not have the service culture of the Far East, and as we go west, the slight influence from the Indian Ocean that we do have, diminishes. Training in tourism is a wide open opportunity for investment.

On the other hand, a few projects in Mozambique are already way ahead to benefit communities. I represent a hotel group which has defined certain policies to ensure the community benefits from the outset of the investment. We invest in specific areas that are pristine, namely in national parks, be marine or land, and pride ourselves in maintaining a close relationship with the surrounding communities. In one of our investments, on an island, we started out by creating an association which unites all the community leaders. Funds destined to the community are controlled by this association, where we uphold two seats on the board to ensure transparency and correct application of funds. The local people are discouraged, not only by us but also by the Park funding authorities, to use the natural resources available. We have had special programs to teach them alternative methods of sustaining themselves on a daily basis, as well as guaranteeing adequate education for the younger generation, in order to be able to train more and more in the near future, so that we may employ as many islanders as possible and reduce extra costs of having to house and feed workers from the mainland on a permanent basis.

After 8 years of operation, only in the last two or three years have these communities been seeing direct benefits of tourism as it has taken that long to produce visible results. The creation of micro agricultural projects in designated fertile lands, now supplies the Resort with an assortment of vegetables. Eco guests want to find out about our local culture; we have created a cultural village whereby daily guests are taken there to see what is done in terms of artefacts without damaging the environment. The communities have built several dhows, paid by us, which transport islanders to and from the island to the mainland. Over and above this, sunset cruises are done in dhows specially fitted to hold even barbeque on board and operated by islanders!

Ex fishermen, in order not deplete the corals and reef fish around the area, have dhows, again paid by the company but built by them, which transport goods along the coast of the mainland, as well as transport our goods from the mainland to the island.
A choir group has been created with children to do shows for the guests. Some ex-workers from the Resort have now set up a company that provides meals for the staff (breakfast, lunch and dinner). Another ex employee now sells fish that is bought from outside the park boundaries. A small scale economy now exists to be able to afford fish and is understood by all that natural resources are to be kept sacrosanct for that is their livelihood for the future.

A group of elderly women, unable to take reading classes anymore, has been created to clean and rake the beaches in the early hours of the day.

We have built a community centre where a maternity ward is also installed, dramatically reducing one of the main causes of death in the island.  This centre has solar power and provides a multipurpose room that serves as a general meeting area and a classroom for literacy classes for the elderly.

A malaria program has been drawn up to ensure comfort both for guests and staff alike in all the surrounding areas and due to the regularity that this program has taken place, mosquitoes now have become less and less of a threat.

When a cyclone hit the island some three years ago, every infrastructure was devastated. With the help of the operators we brought in a plane to provide roofs over practically fifteen hundred people, but the main thing in this was that the community did not resort to begging for money or sustainability, between the operators and the Association, enough money was available to get them back on their feet in no time rather than wait for assistance from outside, which is the norm and not the exception in case of natural disasters.

With education and sustainability, people can dedicate themselves to the art of better performance, and that is what we need to be able to compete with the rest of the world and only with projects where people care will we succeed. And by people, I mean, we the hosts and the guests, to ensure a returning client.
In all the things I have mentioned, the State has not much involvement except legislate zoning areas and deliver to communities by providing meaningful education and basic resources. On another note, incentives to the private sector should be given some thought in order to increase the number of resorts that could help develop programs such as this one.

Mozambique, notably the Government and donors, in terms of community development and sustainability, already has some noticeable investment projects supporting this, such as the anchor projects (supported by the IFC) and the Northern Arch Project (supported by USAid). Other projects on a not so large scale are also on the runner up.  Governments must, however, provide infrastructures to be able to attract our competitors markets, ensure cheaper access to our destinations, create such destinations, and then provide security for tourists, from the surroundings of the arrivals and departures, to the attitude of the officials, be it customs or immigration, to the airports officials and then on a larger scale, create community awareness that tourism is beneficial for all, not only for today, but for days yet to come. Once they start seeing the benefit of this transversal industry, the communities will be the first ones to start delivering quality to tourists, be it high end or not. One thing is for sure, the business community cannot do it all, and at the moment, it’s up to us to help the government get on track. This, by itself, is an expensive financial exercise and not knowing how to move forward in a country such as this one, may prove to be critical in any investment.  But there are rewards, such as investing in a new environment and having the upper hand of the future of the tourism globe where a return on the investment in tourism is less risky than in many other places.

This is also the moment to plan “smart tourism” – clean: green: ethical and quality – no matter where in the product range and public/private partnership to extend operational and delivery capabilities. Skilfully done, it can reduce medium term costs while increasing customer appeal and satisfaction. For the UK Olympics or the African Soccer World Cup there will be special positioning and promotion challenges.

In this context, it’s vital to position tourism as the logical sector to help economic stimulus – whether its employment support (because we create so many jobs) or infrastructure programs (because our payback across the economy is so pervasive and wide ranging). Particularly when financial mechanisms are considered – we will deliver on tax breaks and moratoria better than most industries and money spent on tourism promotion will provide massive export and investment returns.

It’s equally vital to stay on course with our development and climate action, because it’s right and because policymakers must do so. Tourism is critical for development as an export driver and job creator. It’s critical for climate, like all major socio-economic sectors and a key component of any green technology paradigm shift.

Today, any consideration of the future should be like three-dimensional chess, intensive actions in the hyper-dynamic 2008 economic game must strengthen the 2015 development game and the 2050 climate game. Such a vision is not easy, faced with the immediate crisis of this proportion. But when the upturn occurs, because economies ultimately correct and mobility is hardwired into the human gene - the big winners will be those who really understand the value of aligning short- and long-term decisions. Africa, we hope, will be ahead of the game!

In the final analysis the private sector will be the main deliverer and beneficiary – but governments have to create the enabling framework.


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By Rui Monteiro

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